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POLITICAL PARTIES COMMIT TO COLLABORATE WITH BUSINESS LEADERS TO GROW ECONOMY AND CREATE JOBS

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Johannesburg, 12 April 2019 – The African National Congress (ANC), the Democratic Alliance (DA) and the Inkatha Freedom Party (IFP) today committed to continue working with business leaders to pull the economy out of the doldrums and create much-needed jobs.

The parties – represented by ANC Economic Transformation Committee Head Enoch Godongwana, DA National Chairman Athol Trollip and IFP spokesman and Member of Parliament Mkhuleko Hlengwa – addressed delegates attending the Political Parties Seminar hosted by the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) at the Johannesburg Country Club this morning.

The parties collectively agreed that the stagnant economy, high levels of unemployment – particularly youth unemployment – and rampant corruption, among other socio-economic woes, were of great concern and that Government needed to work closely with the business community to address these challenges. They also agreed that there is a need for Government to work with manufacturing sector leaders to reverse the fortunes of this sector, which has over the years struggled to operate in a low-demand, and high-administered costs environment.

“The manufacturing sector is one of the critical contributors to the South African economy. It is, therefore, of paramount importance to the economy. It is, thus, important that Government continues to work closely with captains of this industry to ensure its global competitiveness and survival,” Mr Godongwana said.

In addition to working closely with the business community to grow the economy, Mr Hlengwa said Government also needed to invest in infrastructure in the form of electricity and water, among others, to ensure that businesses thrive and subsequently contribute to economic growth. He said it was also of critical importance that the Government overhauls the education system to ensure that the country produces skills relevant to the fourth industrial revolution, as required by the economy.

Mr Trollip said policy incoherence was detrimental to the economy and that the Government should do whatever it takes to address this challenge if investors were to come on board.  He said the Government also needs to continue to create sector-specific incentives that reward investing in the local economy and job creation.

 

A Third Consecutive Decrease

SEIFSA Concerned About Increase in Inflation Rate

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Johannesburg, 21 November 2018 – The increase in the official inflation number released by Statistics South Africa (StatsSA) today does not bode well for hard-pressed businesses in the Metals and Engineering (M&E) cluster, which continue to face headwinds amid low levels of domestic demand, a generally weaker exchange rate and increasing operational expenses, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.

According to the StatsSA data, the annual Consumer Price Inflation (CPI) increased to 5.1 percent in October 2018, from 4.9 percent in September 2018. The index also registered an increase of 0.5 percent on a month-on-month basis in October 2018.

“An inflationary environment will definitely add to the pressure that local businesses are facing, given its direct impact on consumer demand for goods. Moreover, the generally high petrol price invariably adds to businesses’ logistics costs, and this, in turn, negatively impacts on the cost of doing business. The increase in inflationary pressure is a huge challenge for companies trying to improve on operational efficiency and margins,” SEIFSA Economist Marique Kruger said.

She added that with the official inflation data now trending even closer to the upper band of the South African Reserve inflation target of 3% to 6%, SARB Monetary Policy Committee members find themselves in a difficult position when they meet tomorrow.

“The decision on whether or not to continue with an accommodative monetary policy stance will be a fiercely contested one, given the official mandate of the SARB to contain inflation from galloping away,” said Ms Kruger.

She said that given the current state of the economy, leaving the repo rate unchanged will help in reducing borrowing costs, thereby providing impetus for a rebound in domestic growth.

SEIFSA is a National Federation representing 23 independent employer. Asociations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making companies to micro-enterprises employing fewer than 50 people.